M&M dares to take on US market

Utility vehicle manufacturer Mahindra & Mahindra on Monday announced plans to make a foray into the United States with a sports utility vehicle (SUV) and a pick-up van, becoming the first Indian auto major to break into North America's passengere vehicle market.

The company has signed a distribution agreement with Global Vehicles USA Inc for the import and distribution of Mahindra vehicles, parts and accessories. M&M is likely to price its product aggressively in a market where its competitors would include global giants like Toyota and General Motors, industry officials say.

An announcement of the date of launch and other details will be made during the second quarter of 2007. Global Vehicles has an established channel network of 130 dealers, which would expand to around 200 in the time for the launch, the company said.

M&M's automotive sector president Pawan Goenka said said the decision to enter the world's most demanding automotive market was a deliberate and rational one.

"As the market changes, we realise that even to stay on top of the Indian market, we need to be a global player and the US forms a crucial part of our strategy to make Mahindra a truly global company. Close to half of the global sales in SUVs and pickups is in the United States and we want to capture at least a small fraction of that to start with," he said.

The company has initiated a concerted drive in product expansion, innovation and globalisation and its vehicles have seen a fair amount of success in recent years. M&M will be launching an upgraded version of its SUV and pick-up and is investing in the products to meet the US regulations. Scorpio SUV and pick-ups have been widely accepted in the Indian and overseas markets.

"We are fully equipped to meet the demanding US conditions when we launch our vehicles in the US. A majority of our export range of vehicles would be upgraded to match US standards," said M&M senior vice-president, product development, Arun Jaura.